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Worldwide Exchange

Ross Westgate and Kelly Evans consider the business stories that have global significance.




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Russia 86, U.s. 39, Crimea 30, Eu 28, Us 15, Imf 11, Moscow 10, John Kerry 10, Vladimir Putin 9, Gazprom 8, China 7, Obama 6, Euros 5, Europe 5, S&p 4, Julia 4, At&t 4, Washington 4, Uk 4, Julia Chatterley 4,
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  CNBC    Worldwide Exchange    Ross Westgate and Kelly Evans consider the  
   business stories that have global significance.  

    March 4, 2014
    4:00 - 6:01am EST  

welcome to "worldwide exchange." i'm julia chatterley. markets stabilized and sentiment improves after nervous trade yesterday. this as putin orders his troops back to base. u.s. secretary of state john kerry touches down in kiev later today. negotiations with the imf are under way as ukraine seeks to shore up its finances. ukraine's prime ministers are in a dire state.
>> we need to quickly design and implement the austerity program. in corporate new, glencore xstrata beats forecasts. and president obama focuses his attention back on domestic issues as he prepares to unveil his fiscal 2016 budget plan today at 11:30 eastern. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. welcome to "worldwide exchange." a very different picture behind me compared with the start of the show in yesterday's session. 9/1 greens to red these morning taking the stoxx europe 600 up 1
is.2%. as you can see, the picture very volatile this morning. what we have heard is that russian troops have been removed from the border. exercises that they were completing on the western boundary of russia, being seen by the markets as a concession, as lowering sentiment and danger surrounding the situation in crimea at the moment. as you can see, danger across the european markets this morning. they want to point out the german markets, 1% higher here, but losing at 1% yesterday. we had to put the bounce in a bit of perspective. of course, you saw the micex index falling yesterday. seeing a rebound here. similar story to the german markets of around 3% here. so a minor takeback of the losses we saw yesterday. similar stories for the ruble this morning, stabilizing around the 36.36 level. officials yesterday spending between $10 billion and $ 12 billion to try and stabilize the
currency yesterday. similar stories of on some of the big stories yesterday. similar losses for gazprom, too. let's take a look across the risk asset sentiment this morning. euro/dollar, higher by around 0.1 is%. a muted reaction as far as the dollar yesterday were concerned. we have heard putin's aides suggesting this morning if sanctions were placed, they wouldn't repay dollar loans and they would look to remove some of on their dollar assets to having very little reaction this morning, takeback as far as gold and create a consent. russian president vladimir putin has ordered troops that took part in those military exercises in central and western russia. an important point to make is he never said this has anything to do with the ukraine, the times was just unfortunate. one of the putin's aides talking this morning about the tension of the sanctions in the west saying russia would move away from using the dollars and
create its own payment system if those sanctions were imposed, adding russia may refuse to pay back toss u.s. loans. u.s. upping the pressure in the bid to isolate russia from the international community. officials in washington have announced they're hoping military cooperation with russia and suspendling trade and investment talks this as u.s. secretary of state john kerry heads to kiev to talk. yesterday, putin said u.s. president barack obama is on the wrong side of history. >> what cannot be done is for russia, with impunity, to put its soldiers on the ground and to violate basic principals that are recognized around the world. the strong condemnation that is received from countries around the world indicates that russia is on the wrong side of history on this. >> all this as the imf kicks off
ukraine's government on financial aid. steve sedgwick is in kiev. steve, we may see geopolitical risks here, but the crisis as far as the ukraine is concerned continues to remain, whether it's about the crimea or the economic situation. i know you've been talking to the economic minister. what did he say about the situation? >> both the economy minister and the prime minister, we've been running by them all morning and they were saying no more russian boots on cripplean soil. despite the fact that there is more risk on attitude, the fact is apparently there are 16,000 troops in crimea. there may be an end to those war games and a return to barracks to the east of this country and russia. ed this is a very popular ukrainian paper. i'll tell you what this says. it says this is occupation. and a ukrainian lady in crimea
looking at the troops. despite the fact that there may be lessening of attention because of those troops return to go barracks, the fact is the threat remains. and the threat remains of potential action from russians and the concern that they will invade from the east, they will invade in the north of the country, as well. this country has a 2,300 kilometer border with russia, as well. it's a welcome step those troops have gone back to barracks, but it doesn't change the fact that sovereign territory has been violated. the russias will say they are there to protect russian interests, despite the fact that the ukrainian government is there despite independent journalists saying there has been no violation of human rights in the east of this country or crimea. spoke yesterday about those imf negotiations. he's hoping of a shore up of
finances within a few days. it's certain to say the situation in this country is every bit as dire as the geopolitical situation. possibly worse after decades of on cronyism, mismanagement of the country. let it be said the recent experience with the present yanukovych in 2010, on 2008 and 2010 the imf had to freeze loan packages to these country because terms were not being met. haven't got a great record of dealing with the imf. so we have huge problems on that front, as well. the other points away, of course, very important is any future deals with this country has to have some form of russian involvement economically. ukraine as as big a trading partner as russia. you can't negate overnight the pipelines that go through this country to the west, and that is my final hit in this west, the fact is, what kind of sanctions
can the eu put together when a third of their gas comes from russia? i'll leave that question back to you. >> some breaking news this morning, ukrainian parliament ratifying an agreement to receive $610 million euros in loans from the eu. this was a deal that was agreed back in 2013. but was never ratified under yanukovych. a lot of talk this morning about seeing some fast paced or rapid paced financing coming from the imf and the eu. we'll keep you abreast. those imf negotiations going on right now in the ukraine. this morning, after russian president vladimir putin ordered troops stationed on the eastern ukrainian border back to base. this comes after the imf agreed to sanctions on russia. the eu leaders will work for an emergency summit on the continuing crisis on thursday. the eu attempts to show a unified front on russia was
damaged yesterday by a british foreign office official who was photographed entering downing street carrying a document warning the uk should not close financial centers to russians. carolin, this highlights the point that it's tough to get agreement even within the eu on this subject. but should they manage to do that, what kind could those kind of sanctions involve? >> the eu was pretty big about that. they said they can suspend talks on visa matters and they could take the unb targeted measures. the press has speculated this could include freezing of assets for a link to the misappropriation of funds, it could involve an arm embargo against russia, but that hasn't been confirmed. and yesterday there were a lot of questions about what could
trigger those sanctions. because that statement was so vague, she continued to be quite cage cagey about it. and then she was asked again, what would that -- what would it trigger? she says, you know what? we do want to see russian troops being sent back to their ba barracks. it's not absolutely true whether if we don't see those russian troops being sent back to their barracks by thursday if those sanctions will be enforced, but this is the warning that has come out of the eu against russia yesterday. we know catherine achuthan will be meeting with his counterpart either today or tomorrow and she is going to stress that point once again. but we also know why the eu hasn't been more aggressive with regards to russia. it's because of their energy dependance on russia.
one-third of the national gas coming from russia ironically through ukraine. and you made a very important point there, we know in many cases oligarch has ties to london and that's why the uk, too, may not want to be more active than someone else. i think the eu is going to remain pretty passive here and they will continue to find a peaceful and diplomatic way to solve this crisis. >> certainly something that angela merkel and the germans have been pushing for over the last couple of days. we'll come back to you later in the show. joining us now is benwa ann from societe generale. you were saying yesterday that we need to take a central strategy here particularly where central europe is concerned. has your view changed given what we've heard about the troops in russia right now? >> the situation remains quite volatile. so it's probably too early to
make a final call on this, as we discussed earlier the situation is evolving and we are still in much more on the bull markets. but you're right, from the headlines, from the military headlines and even from the central bank of russia that has stepped up its intervention to defend the ruble. >> 10 billion to 12 billion is liberal. do you think that's more about broader market sentiment than it is about what the central bank did yesterday? >> yesterday was not an appropriate response in my view. that was not enough. but what they have announced today is in moving to a daily discretionary rule. in other words, they are sending the signal they're ready to do more. and that's what the market wanted to hear and that's why the ruble is actually bouncing back. >> and what about putin's aid this morning, suggesting that they wouldn't pay back the u.s. loans if there were sanctions,
that they would move away from using the dollar. they would step up their own payment system. the market has taken that with a bench of salt here. >> it's tough to avoid the u.s. dollar. it remains the war currency, so i would probably think along the same lines, as well. >> so right now, it seems that people have very little plan to move out of the crimea. he's going to leave his 16,000 troops that we know of right now in the cripple ya region there. if this does become a fundamental issue with yet emerging markets, do you think this sentiment can continue to recover this week? >> definitely. the crisis last year created some liberal markets. we might be in the same situation, but hopefully a
solution will be -- and it might turn out to be a buying opportunity down the road. the jury is out. >> what should investors watch in terms of seeing that sentiment change? you mentioned tapering and the emerging markets. if you see sentiment, would that one change? is that a signal to investors here about broader concern in central europe? >> the irony of it all is, i'll tell you what, central in markets was on a fast track to recovering before this ukrainian story broke out. with the return of in-flows, we still -- our investors and i hope this is just a hiccup to the start. but i'm telling more conservative on energy markets at this point. >> so irrespective of the geopolitical risk in russia, you're talking about emerging markets on a evaluation basis? >> people want to think.
in fact, we are seeing growth numbers picking up all over the place. the pmi was pretty good. growth is picking up, appetite is picking up. and it's amazingly attractive. >> interesting. benoit anne, thank you so much for talking to us. now, cnbc's live -- is up and running for the latest. head to now, the 84th international motor show gets under way in geneva today. we bring you the unveiling of rolls-royce's new car, the ghost ii, as well as an interview with the company's ceo. stay with us. ♪
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welcome back to the show. we've had comments from germany's foreign minister, welcoming reports of a partial movement of russian troops away from the border. i think the crucial word is casual because part of the talks we're seeing a formal move to the troops, including the crimea
peninsula. we've only seen those doing military operations on the borders moving right now. major oil companies have recovered after a difficult session in yesterday's trading. the threat of sanction owes russia has given investors pause for thought. bp heavily exposed given its 20% stake in russia. royal dutch shell has a stake in russian eng products. ex y exxon and statoil also have stakes in the russian gazprom. russian courts have rejected bp's appeal from recovering money from the gulf oil spill, even if they can't trace their losses back to the disaster. in december, a lower court ruled bp would have to live with an earlier interpretation of its
multibillion dollar settlement. the appeal escort says the administrators still have the power to reach out. a bp spokesman says the company disagrees with the ruling and will tr a further appeal. bp trading in this morning's session, as you can see, down by around 0.4%. glencore xstrata trading higher over 2%. it beast forecasts of its annual results since the group was formed after a strong performance off its trading arm. it's in talk toes sell a copper mine in peru for an estimated $5 billion. as we said, we're seeing that market up about 2% in trading today, up around 4% over the last 30 days. stay tuned to cnbc. our colleagues in the u.s. will be catching up with the ceo t of bhp billyton and total later today. it will be interesting to see
what they say about russia and the potential sanctions are concerned. moving on, money markets are on the rise again in china. the central bank drains more fund from the system. they drain nearly $14 billion in the purchase agreements today and it's expected to pull more cash on thursday as the move follows a two-week slide in the yuan. it's added liquidity to the system as investors bought u.s. dollars leading the banking system flooded with the currency. of course, we're going to be talking later on in the show about the national people's congress that kicks off tomorrow or this evening and talking about the type of reforms that we're hoping people will see consolidate from their comments on the enterprises. where will their growth forecast be? of course, what are we going to say about pollution? another crucial issue, we'll be talking about that later in the show. no surprises from the reserve bank of australia as it kept interest rates unchanged at 2.5%. the rba said cuts were still
working to improve consumption in the housing market. the fact an upbeat housing report earlier in the day had few gains in the aussie dollar. but the central bank called aussie dollar historically high yesterday which made for a volatile trading session. now, over to the u.s. president obama will release his fiscal 2015 budget plan today. that's at 11:30 a.m. eastern. it's a month late with the delay attributed to the budget deals passed by congress in december and in january. the nearly $4 trillion plan dropped earlier proposals to reduce future social security benefits. it aims to cut taxes for more than 30 million working americans and expand credit for middle class families to avoid child care and college costs. president obama will ask for more spending on u.s. infrastructure, such as highways, bridges and trains. now, old man winter strikes again. the senate banking committee has
postponed today's confirmation hearing for three nominees after a storm blanketed washington with 2 to 8 inches of snow shutting down the federal government. no new date has been set so far. now, back to our top story. a deadline for ukrainian troops to withdraw from crimea has passed with no shots fired. nbc's bill neely has the latest from the region. >> reporter: russian intrups are fighting their grips. they've fought wars before to take this region. this time, they didn't have to, marching in without firing a shot and taking it in just three days. the russian march against crimea is relentless and it seems unstoppable. the big question is where exactly in ukraine will these men stop? russian troops now surround
ukrainian army bases, this one of the biggest. ukrainian soldiers inside won't leave, but there's no sign they're preparing to fight. ukraine's navy in crimea is equally defiant, singing their national anthem. but they, too, are surrounded, their ships blocked by russia's navy. crimea was russian for much of its history. its people fly the flag, pray for the troops and welcome russia's invasion. >> yay, everyone is russia and the crimea was russian before. so this is russian territory. >> the pro russian revolution in ukraine isn't over. people have stormed city hall demanding a split from western ukraine. crimea isn't the only line in this country russia can exploit. the march of russia's soldiers may not end here on. still to come on the show,
mixed messages out of moscow. putin calls time on military exercises, but russia could see fault on loans. stay tuned as we cross to moscow for the latest.
markets stabilize and sentiment improves after nervous trade yesterday. this as putin orders his troops back to base. u.s. secretary of state john kerry is due to touch down in kiev later today. the ukrainian parliament has ratified an agreement to receive a $610 million euro loan from the eu. this as the country's economy minister warns that the ukraine's finance ministers are in a dire state. the treasury is empty. we need to quickly design and implement the austerity program. >> in corporate news, glencore xstrata beat forecasts as it's trading on health to offset
weakness in its mining division. shares open towards the top of the market in london. and president obama focuses attention back on domestic issues. he prepares to unveil his fiscal budget for 2016 today. that's at 11:30 eastern time. european markets trading higher in this morning's session. taking back some of the losses that we saw in yesterday's trading session. i'll point out the german markets, i remember losing 3.5% in trading yesterday. so just taking back around 11% of those losses in trading today. stronger performance, too, from the russian index, up 3% after losing over 10% in trading yesterday. quick look as far as the foreign exchange markets are concerned. muted performance from the dollar yesterday, despite some of the initial concerns. you can see dollar/yen trading higher this morning, 101.78.
slight move higher for euro/dollar this morning on the back of those reports of the russians not paying back u.s. loans and perhaps moving away from the dollar. as we discussed this morning, how would they actually manage to achieve that, at least in the short-term? quick check on the bond markets this morning, interesting to see a sort of sell-off in some of the more core bond and treasury yields this morning. the core, though, continuing to see spreads tighten, benefiting over the last couple of days in the tensions we see across the world. vladimir putin, the russian president, has ordered troops in central and western russia to return to their bases, that's according to russian news agencies which are quoting a kremlin spokesperson. moscow denied the exercises had anything to do with ukraine. one putin aide is saying russia
would move away from using dollars and create its own payment system if sanctions were imposed, adding russia may refuse to pay back u.s. loans. meanwhile, the u.s. is upping the pressure in a bit bd to isoe russia from the international community. they are halting negotiations with russia and suspending trade talks. this as u.s. secretary of state john kerry heads to kiev for talks. yesterday u.s. president barack obama said russia is, quote, on the wrong side of history. >> what cannot dedone is forimp its soldiers on the ground and to violate basic principals that are recognized around the world. the strong condemnation that it's received from countries around the world indicates the degree to which russia is on the wrong side of history in this.
>> jim maceda joins us now from moscow. jim, we've been talking about this, do you see this as a pull back and a lowering of tensions herely vladmy putin or is it just coincidence? >> hi, julia. it's not questions dense. it wasn't coincidence when they games were called five or on six days ago to take place along the russian/ukrainian border and it's not questiocoincidence tha they're ending today. vladimir putin could just as well have changed, for whatever reason, changed tend date. if this does happen, keep in mind, it was ordered that we haven't seen any indication of a pullback. the -- certainly if these war games do come to an end, it's going to mean that that massive show of force, we're talking about 150,000 troops, 900 tanks,
200 warships and airplanes. i mean, this should really bring the temperature down just in the seeing of and the doing of that kind of pullback. so russia has built up a fourth -- on crimea and division 5, 15,000, 16,000. it has complete operational control of crimea and it's still poised to strike anywhere else in ukraine if vladimir putin decides that it's in russia's interest to do so. by the way, tensions spiked even further last night, or higher, i should say, because of that series of some are calling it psychological warfare, ultimatums, is surfacing late yesterday that the ukrainian military would either surrender now, this morning local time, or be attacked. those ultimatums were denied by the russians. now we're hearing there are some warning shots fired, as well,
tef at the baobek war base because some ukrainians who left the base came back to demand their jobs back. the russians didn't want to deal with them. when they didn't move, they fired into the air. >> that's the crucial point, we've agreed that it's not coincidence that he's pulled troops back from the russian border. as you rightly point out, including the threats that weren't threats last night, he has no intention of leaving the crimea at this stage. will he get away with it? >> well, he certainly believes he'll get away with it and he has, apparently, no intention. this was the crown jewel that he wanted. he saw, i'm sure in his thinking, although i don't presume to understand it completely, that experts that we talk to say that he saw the down
fall of the yanukovych government as the beginning of a nightmare scenario which would end up with russia losing the ability to rent the black sea fleet base, losing any kind of influence in that part of ukraine, and most importantly, seeing nato encroach even further on to russia's doorstep because that pro western government would eventually join nato. and seeing that nightmare scenario, he probably said with his generals, look, we have to at least capture and control crimea. we don't want to lose that. after we do that, we can see where the dust settles and what we do next. and i think that we are in that particular stage. it could be a tipping point or not. but it feels like over the next three or four days, it will be critic critical. back to you. >> thanks, jim. we'll talk to you later on in
the show. we've just had some -- from the estonia prime minister on the spokesperson handing his his formal resignation to the president. this is just a formal move, was expected. in the last couple of minutes, we've had february construction pmi data out of the uk. it's come in at 62.6 versus 64.6 in january. so slightly weaker. so slightly weaker than expected. the reasoning given is rain and flooding, which has affected house building. so perhaps to be expected. but slightly weaker than expectations there. very little move as far as sterling is concerned on that number. now, the diplomatic ball is firmly back in the eu's court this morning after russian president vladmy putin ordered troops on the ukrainian border back to base. this comes after eu considered
sanctions on russia unless moscow's troops withdraw from their positions on the crimean peninsula. eu leaders will meet for a summit on the crisis on thursday. eu continues to show a unified front was damaged yesterday by a british foreign office official photographed entering downing street carrying a document warning against russia sanctions. carolin roth is in brussels. we've gained very little detail of what would happen if russia doesn't move its troops out of the crimea. what was your take? >> you're absolutely right. yesterday, catherine ashton said she wants to see clear steps of a de-escalation come thursday. this as you pointed out eu leaders will be meeting here in brussels for their emergency summit. she was pressed by journalists
during that news conference yesterday after what would trigger those sanctions. she said we want to see russian troops sent back to the barracks. she meant russian troops currently in crimea. if that doesn't happen by thursday, though, it is unclear whether the eu is actually going to go ahead with its sanctions. what could the sanctions look like? well, catherine achuthan mentioned yesterday that they could suspend talks on visa matters and she talked about targeted measures. it could include an arm embargo to russia. it could include freezing of assets of people that are related to the misappropriation of funds in the ukraine. now, julia, i know that you're going to be across the leader summit on thursday and you're our expert in all things eu. do you actually think that the eu would rachet up the pressure on thursday if nothing,
absolutely nothing happens in crimea on thursday? >> i think as you've been saying all week, it's difficult to see them reaching some kind of agreement as far as sanctions are concerned. but i do think what's going to be critical is to decide financially how we can support the ukraine at this stage in particular, too. as always in european issues, it comes back to angela merkel and what she can wing as far as dealing with the likes of russia and the ukraine over these issues. angela merkel said she was having discussions with vladimir putin. we'll have to see what she can pull out of the bag this time, as well. >> you're absolutely right. we know why germany and the uk have been more constrained. with germany, it's about the eu's energy dependance on russia. one more time, we know that one-third of the eu's national gas supplies coming from russia. ironically, through ukraine. with regards to the uk, we've all seen the story.
we know that russian oligarchs have significant financial interest in the city and no one wants to endanger that. so we know that the russians still have a trump card in their hand. >> absolutely. and i go back to the point you made about energy sources, too, with the german webs as well, in the north stream pipeline. so yes, a lot of vested interest, as always, in this dealing and particularly where russia is concerned. we'll see what happens. investors reacted to potential sanctions set against the federation in trade yesterday. the shares have stabilized in trades today. european counter exposed to the troubled area were hit hardest in the session with evrez and raiff bank falling particularly hard. now also making up some lost ground. while energy companies are expected to be the most affected
by ongoing turmoil, companies in russia's biggest trading partner, germany's volkswagen and siemens are highly exposed, as well. they have direct exposure to the ukraine, citigroup, and it closed in the red yesterday. my next guest is a co-founder at trusted sources. christopher, you actually believe, going back to the point that we were just talking about angela merkel, that she is going to be pivotal in this. why? what can she achieve here? >> i think what she's proposed is the most plausible way of diffusing the situation, which is a multi national political dialogue about ukraine. potentially under the auspices of the osce. the -- seeing that president putin has accepted this in principal, fist not the esce but
that's a detail. why is that important? really, because russia's position, in my opinion, is that it will not tolerate a hostile anti-russian government being installed by unconstitutional means with the support of the western power necessary a country next to it which it has vital interests in. and it wants to have a process whereby ukraine's internal politics and its external relations are agreed by everyone who has an interesting. now, this position, of course, is rejected by western europe and the united states on the grounds that it compromises or qualifies in some way ukraine's sovereigncy. but getting to that position without abandoning the point of principal is probably the way through. >> you say putin goes into damage limitation exercises as soon as he's got what he wants. isn't what he wants the crimea here? he's saying that situation is going to resolve itself or is he going to remain there?
is there still going to be some level of russian occupation? >> this is the sort of question, whatever the answer, egg on the face in 24 hours' time is a risk. my thought is the goal is not to simply occupy crimea. it's to put a signal that the anti-russian government in ukraine is not tolerable, especially as it came into power without being elected. ukraine is very divided. >> but to say that he doesn't want the crimea region, $50 billion of value wiped off the stock market, concerns about the russian ruble, questions being asked domestically about -- is that not enough to sway him, do you think? >> to sway him with not going ahead with the outright an exation of ukraine. turn it around. why are markets turning around today? markets always respond to
uncertainty. where might this end? clearly, that's not the aim. so i think that ukrainian -- crimean autonomy, the passage of ukraine with arrangements which give some collegial oversight of ukraine, that's, in my view, the russian aim. putin is clearly upset by the agreement with ex presidentan
co j yanukovych fell down. the bad news is that they're not going to return to their legal bases. but between now and thursday. so given that, presumably, the european foreign ministers will feel obliged to make some actions. but up the military's intervention in georgia in 2008, there were some sanctions and penalties which were slapped on. they weren't that dramatic. and as the situation diffused, they were removed. so i think the damage limitation pattern dpraully coming out of this looks like the more likely scenario. i may be optimistic, but that's my view. >> and this has been a painful couple of days for them been but their assets vg telling off for the last six months to 12 months. this is not a new story as far as investor concerns about russian assets.
do you see now buying opportunity given the significant fall, additional fall that we've seen over the last 24 hours? >> well, i'll talk like a politician in evading your question and saying ukrainian assets is obviously opportunity. there was clearly a risk that multi lateral aid could come with private critters. that looks like to reduce. money will pour into ukraine. that's good for investors there. ukrainian debt sold off. as to your questions on russian assets, russia was an unpopular market before where everyone looks at russian growth. now the assets have been smashed even more. if any type of settlement comes out of this crisis, obviously, these assets will be up for a serious bounceback. but time sg everything. tension is likely to remain pretty high for a while to come. so is it's another one of those trades that if you don't jump in today, you'll miss it. >> diplomatic point, but i get
it. i get the point. time will tell. christopher fwranvillgranville, co-founder at trusted sources. still to come, will the national people's congress set reform toes clear the air? we'll have a preview right after the break. so our business can be on at&t's network for $175 a month? yup. all 5 of you for $175. our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share. what about expansion potential? add a line, anytime, for $15 a month. low dues, great terms. let's close! new at&t mobile share value plans our best value plans ever for business.
i welcome back to the show. the annual national people's congress in china saturdays on wednesday. the recent data reinforcing concerns of a slowdown, this meeting should give us a sense of the government's priority for the rest of the year. eunice yoon tells us of the top things to watch. >> familiar place to familiar faces. every march, lawmakers across china gather in the capital's beijing to support their leaders and their efforts to steer the nation. and this year, delegates will rubber stamp policies shaped by challenges president xi jinping recognized when he took control of the communist part in 2012. >> translator: in the new environment, our party faces
many severe challenges. >> since then, the president's promised big reform, meant to shift the economy from fast paced to sustainable growth. those reforms are sure to be on the agenda at the national people's congress where investors hope the new administration will show they plan to walk the talk of reforms. investment house barclay's expects the government's anti-corruption drive to pick up speed after president xi jinping speeded up a campaign aimed at rooting out -- the brokerage, like many other firms hopes to see changes that would make the economy more account oriented. measures to help liberalize the financial sector and allow the currency to trade more freely. >> china policymakers are interested in bringing in more exchange rate flexibility. they need to have that before they open up their capital economy. >> reforms have raised awareness
that this environmental problem can quickly become a social one. the pollution is a rut of years of double digit growth, no longer expected with the new leadership. most investors believe the government will stick by an annual forecast for growth affecting the reality of a slowing china. eunice yoon, cnbc, beijing. joining us now, a regional economist at cmib research. can i ask you, as far as markets are concerned, they're very interested in just what growth targets come out for this year. what are your expectation these? is beijing far less tied to those figures than perhaps we think? >> well, i think they are willing to be a little bit more flexible now. they are happy with growth about 2.5%. i think there's a little bit more leeway they're willing to go and if they continue to
reiterate that, i think it basically means that they have a conflict zone around the figure itself. same with inflation at this juncture. i wouldn't be too excited as far as the headline numbers are concerned. it will be fitting if they give a resize number which i think is unlikely. >> and what about the prospect of significant changes as far as the currency management is concerned, particularly given the moves that we've seen in the currency over the last week or so? >> well, i think this is deliberately designed to time with the parliament opening in that don't take the currency appreciation for granted and they want to create a little bit more uncertainty around the currency itself. essentially, they are going to tweak around with the economy while obviously in the longer run it means, you know, a stronger currency. but over the near medium term, they do not want it to be a certain one-way bet which in turn could make things difficult
in terms of restructuring the economy, as well. >> i think in part, restructuring is about the local government debt and the associated risk and the financial sector liberalization, as well. what are we going to hear on that? >> well, it will be interesting to see how -- to what extent the details that will announce or whether they will allow issue bonds etcetera, as well. perhaps that will be some way in terms of the details. certainly at this moment, given that the audience is primarily domestic in terms of the premier dressing the chinese, it will be about matters on hand in terms of dealing with it in the consequences of so many years of relentless growth on the environment, on pollution itself. secondary to that will be how to manage growth going forward with all the institutions that still going to undergo i think tweaking and changes in this
environment where it is a massive task. >> you mention today crucial word that pollution resulting in the images of the smog situation. what can they say on that to allay some fears about the situation and how much it could continue to deteriorate? >> at the end of the day, it's all about actions and words. i mean, in dealing with the environment, improving, it has always been a priority for the government itself. yet it has gotten worse. so i suppose we will be looking to see concrete signs. to what extent they're going to close down, you know, industries. they have done so, but they have been taking two steps forward, one step back with regard to how much they want to do. so in an environment where the overall growth has been slowing down because global economy has also eased off, as well. so it is the balance that they're trying to reach, which is difficult at this point because the pressures are
mounting, as we see. >> and when you said it there, two steps forward, one step back, what's the likelihood that the markets are disappointed by what we get from the people's congress? you think expectation res pres pretty low? >> i think we know what we're going to get from this once a year scattering of the parliament it is as eunice pointed out in the package earlier, rubber stamping decisions which have been made early on. in essence what we want to see more are perhaps more the off the cuff comment by the premier in the briefing subsequent when the meeting finishes itself to see whether there is more clarity in terms of what the government can or cannot do in, you know, its current environment. >> thank you much. we'll watch that overnight. thank you thanks for talking to us. let's give you a look at what's on the agenda in asia
tomorrow. china's national people's congress, as we've been discussing the main event on the economy, will look to get hsbc's service sector gauge in the economy in china and understand use. while in hong kong, fast reta retailing launches its second listi listing. in australia, fourth quarter gdp figures will be released. still to come on the show, we cross to kiev. also, we'll be getting out live to the geneva motor show to speak to the ceo of rolls-royce who just unveiled the new car, the ghost ii. stay with us.
welcome to "worldwide exchange." i'm julia chatterley. markets stabilize after nervous trade yesterday as putin orders his troops back to base. u.s. secretary of state john kerry is due to touch down in kiev later today. the ukrainian parliament has ratified an agreement to receive $610 million euros in loans from the eu. this as the country's economy minister warns ukrainian finances are in a dire state.
>> that's our -- we need to quickly design and implement the austerity program. >> in corporate news, glencore xstrata beat forecasts as its trading arm helps to offset weakness in its mining division. shares open at the top of the markets in london. and president obama focuses attention back to domestic issues as he prepares to unveil his 2016 budget plan today at 11:30 a.m. eastern. display you're watching "worldwide exchange," bringing you business news from around the globe. >> if you're just tuning in, thanks for joining us here on "worldwide exchange." let me give you a look at how these markets are faring ahead of the u.s. open. it's a turn for the futures today in the u.s. very different picture from what we were looking at yesterday in line with what we're seeing
across the markets. dow futures indicating higher by around 110 points here. nasdaq higher by around 26 points and the s&p 500 higher by around 12 points. losing ground yesterday, but remember, they finished well off the lows and that sentiment lifting as far as the european markets are concerned. we've got the ftse 100 higher by just over 11% here. the german market, similar story there, 1% higher. remember, they lost 3.5% in trading yesterday, so sentiment may be better, but we're not seeing a full recovery for these markets right now. the french market, 1.4% higher. and the italian markets higher by around 1.7%. i'll give you a look at what's going on in russian assets this morning. remember, we saw 10.5% losses for the micex index yesterday. stabilization as far as the russian ruble is concerned. remember, they spent between $10 billion and $12 billion to stabilize the currency yesterday. we've heard report from putin's aides this morning suggesting if
they did see u.s. sanctions, they wouldn't pay back u.s. loans and they also would not sanction those -- or would not accept sanctions right now. as you can see, we've got gazprom trading higher by around 4% to 5%. a better picture foss those russian assets. they wouldn't pay back u.s. loans. they would look to introduce a new payment system. very little reaction as far as the euro is concerned this morning. euro/dollar, trading higher. taking back some of the bid we saw in the markets for brent, oil and gold yesterday, too. let me bring you up to speed with what we're seeing this morning. russian president vladimir putin ordering troops that were taking part in military exercises have been ordered to return to their bases. moscow always denied saying that those exercises had anything to
do with the situation in ukraine. but putin's key aide talking about tough, potential sanctions from the west. he's reported as saying russia would move away from using the dollar and create its own payment system if those sanctions were imposed, adding also that russia may refuse to pay back u.s. loans. now, meanwhile, in the u.s., upping pressure in a bid to isolate russia from the international community, officials in washington have announced that they are halting military cooperation with russia and suspending trade and investment talks. speaking yesterday, u.s. president barack obama said russia is, quote, on the wrong side of history. >> what cannot be done is more russia with impunity to put its soldiers on the ground and to violate basic principals that are recognized around the world. the strong condemnation that
it's received from countries around the world indicates that russia is on the wrong side of history in this. >> steve sedgwick is in kiev. steve, we may be seeing sign that the economy is still a crucial issue in ukraine. what is the business community saying about the situation right now? >> i'm going to step right in there. i beg to differ. i don't see any -- concerns when the ukrainian government is concerned that there are 16,000, up to 16,000 russian troops on what they call ukrainian soil. now, the crimea may be the majority of russian speaking, but it has territorial agreements including the budapest memorandum signed in 1994, which guarantees its sovereign borders. yes, the russians may have finished their war games, but i would suggest the government here still sees the pressure.
thomas, let me ask you that question. yes, the war games are finished with the russians towards the east of this country, but there is still great threat and fear of invasion, yes? >> the invasion is still in place. we have russian soldiers, about 16,000 russian soldiers that have invaded the country over the weekend. there is no reason to be relaxed. also, the markets have appreciated the end of the war games today in the morning and we see europe opening up about 2 to 3 points after coming down quite essentially yesterday. >> one more fiscal question before we get on to business, you are a russian speaker who speaks a bit of ukrainian, as well. have you ever seen problems for russian speakers in this country? do you fear this government is perce purse cuting, is threatening those russian speaking in this country? >> i have never come across that issue in this country. i have never had any problems
with west, central or on east. the majority of the population in kiev speak russian, as well. >> you're an investment bank. how hard is it doing business at the moment? >> the biggest problem is the russian troops in the country. it's very unpredictable what they will do. otherwise, the situation started to improve substantially two weeks ago when the tensions here on independence square toned down and we have seen the new administration coming into place, getting overwhelming support in the parliament coming into the constitution. the parliament republic which is viewed much more stable by the public and bringing a presidential election forward. which is very important because we were expecting a -- until next year and it is now essentially for -- >> between now and may 25th, it seems inconceivable that people are going to buy risk assets in the ukraine.
sovereign bonds have taken a low. it's very, very hard to sell any product at the moment, isn't it? >> i wouldn't say so. there were a lot of interesting things last week. investors were over -- and participating. so the market is watching investors from the uk, u.s. are very interested. is it fair to say the government on both sides of the fiscal agenda, they have all failed to deliver the economic, political and corruption and hypocrisy that has been promised many, many times, and that is one of the biggest barriers to growth in this country? >> this threat to business here are corruption, lack of rule of law and overregulation. we hope the new government will
tackle these issues head on with reform. >> what do you want to see next from this government? i know you met the prime minister yesterday, had a huge debate with hundreds of business leaders, as well. what do investors need to do to get investment into this country? >> sign the opposition agreement with the eu and nominate a government are credible people with clean track records and conduct over the next two months comparisons for reform. >> thomas, it's been a real pleasure speaking to you. thank you so much for joining us, tom yag, the ceo of dragon capital. the government needs to move quick to get these in place. back to you to the studio. >> thank you so much, steve. a few flashes from the ukrainian prime minister yatsenyuk will meet eu leaders on thursday
according to eu's van rompuy. president obama says john kerry will touch down in kiev today and propose ways for russia and the ukraine to be overseen by a international body. discussions are under way to discussion potential financial aid for the country. the imf delegation is set to stay on the ground until march 2016. now joining me is andrew wood, former british ambassador to russia and a fellow at chatham house will be here for the next half an hour on. chris tenker, from -- investment services. we're heading, it seems, towards the situation where russia moves into the poles of the cripple yan region and there's very little the west can do to change that situation. would you agree? >> yes, that's the short on term
position. given whether or not it will large given the problems it will give to russia itself, we shall see. >> you also said to me before we started the show it's going to cost them, holding the crimea is going to cost them. >> three reasons. foift all, they have to finance it and their budget is under strain. secondly, because despite what you see on the news reels, it's not -- we'll have a security problem whichever way. and certainly because all crimea's links are with ukraine. and they just consolidated in crew crane itself by these actions. >> well, with the sentiment in russia, too, about the move that putin has made in this regard. not everybody surely is going to be happy with this situation
right now. there's concerns domestically about what putin is trying to achieve here. >> that is the case and it means for the country a further tightening of the screws, a further commitment to essentially the state based capitalism. you can call it capitalism, but i'm not sure about that, instead of the sorts of reforms to move to institutions and dialogue between the ruling group and russian society, which are necessary for russia's potential. that's not to say that russia is going to collapse in each case, but it is to say that it is likely to move back into the session, which was really a risk. so the short-term is not good and the long-term is bad. >> politically and economically it seems tore russia. chris, come in here, you see situations like this dominate
the news, but have very little investment xwangt. is th impact. we're seeing a ratcheting lower as far as concerns in the markets. >> that's right. we're focusing on the headlines around ukraine, around what's going on in the crimea region. but i think the bigger issue from an investment standpoint is the implication that this has for people's willingness or risk appetite to get exposure to russia from a longer term perspective. we know there are an increasing number of listings that have come from the uk or the u.s. primarily because there isn't a structural infrastructure in russia itself to provide a credible investment environment. you don't have the patient system investment, you don't have mutual funds, you don't have that kind of environment there. the plan to move in that direction can't be helped by this back drop from an international standpoint. we talk about risk assets, buying equities, and that's a
risk asset. the reality is risk is actually just as much about where you are in the world and what you're doing with your capital. and being exposed to a part of the world where these kind of tensions are building isn't doing this because he's got some ambition is for the region. he's dealing with internal pressures, he's want to go make sure movements towards the eu coming from what's happening in the ukraine now don't leave russia out of the equation. he's conscious that there's a tradeoff in terms of whatever action he's making. investors have to do the same thing. do you really want to put capital to work to risk and exposure where these uncertainties have become there. market reactions yesterday and perhaps a little bit today, probably just a reminder of the fact that investment decisions need to take into account more than just a risk that i'm going to disappointment my numbers. there are other factors involved
that we have to bear in mind. right now, those geopolitical factors aren't saying there's a quantifiable risk in the ukraine or in german equities or italian equities. but there st definitely exposure. i need to -- had that exposure and having against this backdrop. >> that makes sense. thank you for your perspective this morning. now, president obama will release his fiscal 2015 budget plans today. can he get any of it past a stubborn congress? stay tuned. we find out. huh, fifteen minutes could save you fifteen percent or more on car insurance. everybody knows that. well, did you know pinocchio was a bad motivational speaker? i look around this room and i see nothing but untapped potential. you have potential.
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welcome back to "worldwide exchange." stock markets bounceback on a put putin withdrawal of troops. the eu agrees to ratify $10 million of loans. and president obama gets ready to tackle congress with his 2015 budget plan.
some comments from gazprom's ceo across the wires. the ceo says gazprom offers ukraine a loan of on $2 billion to $3 billion to pay off their gas debt to the russian gas producer. apparently ukraine told gazprom on monday that it cannot pay in full for its february gas supplies. they're already unable to pay for the gas supplies that they've used in february. so highlighting the situation, we know the financial situation in the ukraine right now. president obama will release its 2015 budget plan today. that's at 11:30 a.m. eastern. it's a month late with the delay attributed to the budget deals passed by congress in december and january.
it aims to expand credit for middle class families to afford child care and college costs. president obama will ask for more spending on u.s. infrastructure, such as highways, bridges and trains. citigroup expects lower bond trading revenue in the first quarter due to economic uncertainty. the cfo says he expects market revenue to be down in the high/mid teens from a year ago. fixed income accounts for 80% of citi's markets revenue and the first quarter is typically the strongest for its bond trading business. citigroup shares relatively unchanged in trading in the german session this morning. sticking with the banking sector, jpmorgan will pay $400 million to settle lawsuits passed by bond insurers incurring guarantee over mortgage backed securities.
they bought several against the bank and its emc mortgage unit. jpmorgan bought that, of course, in 2008. last year, jpmorgan resolved claims by bond insurer durenti over similar issues and litigation where ambac financial is still attending. jpmorgan is relatively unchanged in the german session. still to come on the show, luxury carmaker rolls-royce unveiled its latest model the ghost ii. will it be a big hit with its big spenders? we've live at the geneva auto show coming up next. really? so our business can be on at&t's network for $175 a month? yup. all 5 of you for $175. our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share. what about expansion potential?
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welcome back to "worldwide exchange." let me give you a look at how the u.s. markets are trading. s&p 500 indicating higher by just shy of 12 points. the dow jones pushing higher just shy of on 111 points. the nasdaq indicating higher by around 27 points. this as the broader market consensus is far more positive in the u.s. session than we saw
yesterday. of course, when we continue to add news of the ukraine/russia story is concerned, we've now got the russian prime minister speaking. he's asked the study risks are providing $2 billion to $3 billion worth of loans to the ukraine, this of course to repay gas debt. they've said the ukraine that they cannot afford to pay for gas that they've used in february. the russian prime minister acknowledging that. also as top security official saying that the situation on the border with russia rooip right now in the ukraine is complicated, but stable. we'll continue to keep you abreast of the latest developments there. still to come on the show, german motors and opel unveil new technology. we'll speak to the president and the chairman coming up on the show. but, manufacturing in the united states means advanced technology. we learned that technology allows us to be craft oriented.
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welcome to "worldwide exchange." i'm julia chatterley. putin has order hit us his troops back to base. u.s. secretary of state john kerry is due to touch down in kiev later today. on the ukrainian parliament has ratified an agreement to receive $610 million euros worth of loans from the eu.
this as the country's economy minister warns that the ukrainian financial situation is in a dire state. >> the treasury is empty. we need to quickly design and implement the austerity plan. and president obama focuses attention back on domestic issues as he repairs to unveil his fiscal budget plan for 2015. that's at 8:30 a.m. eastern. >> announcer: you're watching "worldwide exchange," bringing you business new from around the globe. >> if you're just tuning in, thanks for joining us here on the show. let me give you a look at how the u.s. markets futures are faring ahead of the open. very different picture today, that on the back of reports that russia has removed its trip from the border with ukraine. s&p 500 indicating higher by around 12 points.
the dow jones higher by 109 points and the nasdaq 27 points higher as far as the futures are indicating. positive moves across the european markets this morning. the ftse higher by 1 perls, the german market a similar story higher by 1%. they did lose 357% yesterday. french markets gaining 1.4% and the ftse mib in italy higher by 1.6%, too. that sentiment in russia rallying by 4 had% for the micex. similar story for the russian ruble, as well. now, moving on, cold and snowy weather continues to impact data stateside. the latest auto sales figures for the month of february came in flat compared to last year.
that despite major manufacturers ramping up their promotional offers to try and lure in customers. at the geneva motor show, our very own ross westgate caught up with the coo of ford and offered his take on the weather impact. >> you sit back and look at our performance in february, we had a very strong in for our f series, a strong month for our lincoln brand. had pressure on our cars. a year ago february, we had a strong month. and we're impacted by the weather, particularly for some of our fleet deliveries. the industry itself was about flat. and we think a lot of that is weather related. all the fundamentals, consumer confidence continues to be very strong. the economics in the country continue to be very robust. so we think that march and april will be very big months and a real barometer on where the industry is going to go. >> now, ross is in geneva at the motor show. the automakers were some of the biggest fallers on the market
yesterday. i know you spoke to the ford ceo about the situation in russia. what did he have to say? is there any concern there? >> well, they're watching it with interest. it's a growth market. it's also a growth market for the gentleman who is joining me now, all those russian and ukrainian oligarchs. torsten, it's good to see you. people were just asking me what people think about the situation in russia and ukraine. how important of a market is it for you and how much do you think politics will influence your buys in that region? >> russia is, of course, an important market for us, but we are more interested now that the parties are coming to a peaceful solution at the end. so i'm not so much -- that business, i'm more worried about what's happening in the world in total so that world peace can get adjusted again. >> there's been a big reaction in the markets since putin said he was pulling the troops back. we're standing here in front of a new ghost searry ii.
it's spinning around. this is the most important car, i guess, because it is the one you sell the most volume of. what expectations do you have of this model? >> we launched ghost five years ago and that car has proven to be our backbone for the success stories we have generated over the last four years. so it is a very important car. out of four cars, three cars are ghost, one car is -- and for this reason, this car got a refresh. we call it series ii. new face, new eyes and lots of new technical features inside. and i am very optimistic that we see that let's say the ghost sales continue over the next year to come. >> this is a car that still sells for $230,000? >> 60. >> 260 thousand euros, yes. don't undersell it. who is buying these models? >> 80% of our customers, particular with ghost, are
entrepreneurs. people who are captains of industry, running entitiey ies founding their own businesses and choosing, what i would call, the ultimate business tool for commuting from home to the office daily and that is definitely ghost. and that makes the car successful at the end of the day. >> very quickly, qe has made rich people richer. in the last five years, is that what you've seen in your business, the wealthy people have got even more money to spend on the wealthiest cars? >> yeah, i mean, what we have seen is the called high net worth individuals are growing between 1% and 3% year by year by year. and interesting path also is that the kind of structure of that rally is -- i see business that is very much finance ministers and all that. >> good to talk to you, torsten. if we could just get the
cameraman to take a shot of this car as it turns around, that is the new ghost series ii, which is the bedrock of rolls-royce. i'll come down and gist a test drive, torsten. thank you very much. when we come back, we'll be joined by the president of gm and opel, as well. dig into their story. >> thanks so much, ross. we'll look forward to chatting with you. moving on, russia's top gas producer gazprom says it will remove the discount on prices for ukraine from april. this as russian president vladimir putin has ordered russian troops on the ukrainian border to return to barracks following military exercises. jim maceda joins us now. jim, give us the latest you're hearing on the ground in moscow. >> reporter: hi, julia. it's too early to be talking about a tipping point, i suppose. but this is potentially very positive news.
the kremlin confirming that it has ordered all armed forces involved in those war games that began last week war games along the ukraine/russian border to return to their bases. and we're talking about -- if it's true, we're talking about a huge retreat, 150,000 troops, some 900 tanks, 200 warships and aircraft. so a retreat like that is certainly going to take down the temperature more than just symbolically. that said, russia has now -- up its forces on the crimea to division size, 15,000, 16,000 according to the ukrainian. that is, of course, poised to strike elsewhere in ukraine if vladmy putin thinks it is in his or russia's interest to do. the u.s. and allies are struggling to come up with some effective package of diplomatic and economic sanctions. i'm sure you've been talking about this all day, the freezing of russian assets, the
limitation of visas and what have you. but putin certainly seems unworried, to say the least, about the prospect of sanctions. a kremlin aide said an hour ago that russia could develop financial relations with a number of our countries, he didn't name them, to compensate for any loss through western sanctions. with secretary of state john kerry in kiev today to discuss ways of getting out on of this crisis, there's emerging now a more clear understanding of moscow's end game. according to senior russian officials, they're saying there's only one way out of this crisis. first, reinstalling viktor yanukovych. from the russian point of view, the legal ukrainian president and returning to the february 21st agreement which calls for an inclusive national unity government and new elections, not by may, but by the end of year. the problem with that, julia, is both kiev and washington have said that that plan has already been weighed, taken over by
events. back to you. >> thanks, jim. almost to impress that point, we're hearing from vladimir putin, as you can see live shots of him addressing what we believe is the press corpes in moscow. russia's putin saying there has been an unconstitutional coup in the ukraine and military seizure of power. so reiterating russia's views about the situation in ukraine and the change of the guard as far as the government is concerned. they don't acknowledge the new government in putin, acknowledging that, and they're reinforcing that message this morning. we'll continue to bring you the latest comments that he makes there. but for now, chris pinker, equity strategists, it's the rivers. chris, irrespective of what was going on with the geopolitical risk with russia and ukraine, you were saying right now given valuations of the u.s. and in europe, is it time to be neutral as far as the risk is concerned? >> yeah.
i think with interest, you hear the news flow around this particular event, it's actually in a different form, the news flow we get around any event. it could have been the fukushima disaster, it could have been situations associated with credit crisis in 2007 and '11. we suddenly think it h, has the environment changed? we have this big sell-off in recovery, europe and the u.s. in particular through january. that will take us back to basically where we started. we've got markets largely flat since the beginning of the year and both sides, the atlantic, plus or minus 3%. and, against that back drop, the decision to own equities in through the second quarter of the year saying yes, i'm going to stay with my equities. but i don't need to take unnecessary risks to get those returned because i've not been rewarded for doing so. so we've got a more neutral
start to say yes, if you want to go out and take an outsized risk decision, you will get an outsized risking return if your play comes off. but equities aren't that market right now. but yesterday's events were demonstrated, should gazprom have not made the statement this morning, you would have a different attitude to its cash flow risk. now you have a different set of information. and actually, if you listen to what president putin is repeatedly saying to the first call, he hasn't actually done anything that you wouldn't have expected him to do in the circumstances. the real danger in the ukraine right now or in crimea right now is that it -- what's going on and he's now opened up a situation where something could happen. that's the risk equities have to take into account now. do i make a decision on the basis that there's now more possibility for something to accidentally go wrong? and in those circumstances, no, you don't go chasing after
momentum. >> what about gold in this environment, very quickly? that is something that managed to rally this year and did so yesterday, too. >> basically, it is going to get a reaction in events like this. the thing about gold, everybody focuses on it. when it's getting a reaction from something else. in and of itself, it represents how unmitigating other risks of uncertainty are faced with. that's what gold sits and primarily to do. and will always do so. so it has -- >> very quickly, top trade here. >> the global back drop, the geopolitical back drop is one whereby you are going to make a conscious decision to take on more risk in risky parts of the world. i think actually their place continues to be visible growth stories in the united states. i wouldn't rush into treasuries. i think that's something that's been happening through q1. i think there's going to be a return to continuing to see your
fixed rate return in decent u.s. equities, sold off on a knee jerk reaction in the u.s. without explicit exposed that part of the world, you're going to take that very quickly. >> and chris, great to chat to you. i'm going to leave you with some live pictures. vladimir putin, the russian president, still talking over in moscow, saying that the new government is unconstitutional, bringing home that message. we'll continue to bring you the latest from kiev after the break. ♪ [ male announcer ] this man has an accomplished research and analytical group at his disposal. ♪ but even more impressive is how he puts it to work for his clients. ♪ morning. morning. thanks for meeting so early. oh, it's not a big deal at all. come on in. [ male announcer ] it's how edward jones makes sense of investing.
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welcome back to "worldwide exchange." these are your headlines. vladimir putin describes the situation in the ukraine as an unconstitutional coup. ukraine kicks off talks with the imf and kiev over possible future aid. and in the u.s., president obama gets ready to tackle congress with the 2015 budget plan. >> you are looking at live shots of russian president vladimir putin talking outside russia. this is the first time we've heard him speak since the sochi
olympics. he's pressing home the point that the situation in ukraine was an unconstitutional coup, a military seizure of power. he's saying the ukraine is still in chaos. he says yanukovych, the former president -- all conditions of the february 22nd agreement with the opposition. he's still supporting and he is saying he is still the true president of the ukraine and that the ukrainian people should be able to choose their own future, but on a level playing field. we'll continue to bring you the latest headlines from that report with the russian president vladimir putin speaking for the first time since the olympics. in counter news, courtney reagan has details of a possible merger. >> good morning to you. reynolds american, the parent of r.j. reynolds, is reportedly
exploring a possible bid for rival warlord. the financial times says it could rival of on nearly $20 billion. it is unclear if it would buy all or par of lorilard. lorillard is the market leader in e-sdprets. it bought the brand in 2012. so combining the companies would create a hefty competitor for altria who controls half of all cigarette kaels. reynolds brand includes cool. bat would have to sign off on any potential merger. regulators could present a big
obstacle. the fda is execute nicing the health effects of e-cigarettes, the sales of which are mostly unregulated, at least for now. shares of lorrillard are elevated, up more than 4.5%. reynolds american more than 6%. that in europe today, b.a.t., up 1.7%. we'll have to see what happens. it's an interesting deal, nonetheless. for an industry that has been fully on the decline. we'll see how all this shakes out. for now, back to you. >> thanks so much, courtney. let me take you back to the live shot of russian president vladimir putin continuing to speak this morning the first time since the sochi olympics. he's said the current acting president in the ukraine is not legitimate and only the deposed president yanukovych is
legitimate. slight threat in some of the other comments he's made this morning saying there's no need for now for military force in the ukraine's southern region of the crimea. no need yet to exercise authority in the ukraine. we're talking now outside of the area where they have an occupation, forces already present. russia's putin saying that they use the force in the ukraine is a choice of last resort. so not ruling out force, being in the ukraine. he does say it would be a last resort. more headlines from the russian president vladimir putin straight after the break. we'll keep you updated. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets
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exchange." you're looking at the european markets this morning, taking back some of the losses that we saw in yesterday's session. no reaction as far as the equity markets right now are concerned to the recent comments that we've seen from vladimir putin. this morning, you can see the ftse 1100 up 1.2%. the german markets, 1.3%. the french markets 1.7% and the italian markets higher by just shy of 2%. the u.s. futures similar story there. adding to the gains of the last 30 memberships as far as the futures are concerned, the s&p 500 indicating higher by 16 points. the dow jones right now higher as far as the futures are concerned by 149 points. and the nasdaq higher by just shy of 38 points. back to our top story now, you're looking at a live shot of the russian president va load mere putin. he's been speaking this morning. he's been updating, but this is the first time he's spoken since the end of the sochi olympics. he's saying that the ukraine is still in chaos, but it was an unconstitutional coup that took
place and an armed seizure of power. he believes the former, the deposed president yanukovych is the true president of the country. though he says that he understands the ukrainian people, but they should be able to choose their future on a level playing field. more concerning comments as far as the military use is concerned. he said that for now, for now there's no need to use military force in the ukraine sovereign region of the crimea. no need yet either to exercise authority to use military force in the ukraine, so we're taking it outside now of the crimea. and he's saying that the use of force in the ukraine would be a choice of last resort. though they do reserve the right to use all options if there is lawlessness in eastern ukraine. let's get straight out steve sedgwick who is in kiev. steve, it seems like vladimir putin is just making sure that his stance is still very much on the pressure points as far as
further violence and military use is concerned in the ukraine and in the crimen peninsula. >> absolutely. we're looking at the same footage you are, watching it with ukrainians and international journalists, as well. obviously, there is a degree of indecree duality about his support for yanukovych. and his accusation of torturing of yanukovych, as well. as you say, he was saying those military activities, though, in the west of russia were nothing to do with the ukraine and nothing to do with, obviously, that occupation, which is concernedly going on in the crimea, as well. as you rightly say, the pressure is still there. there is still an occupation of
sovereignty included in that all-important 1994 budapest memorandum of which russia is a signatory. but he's saying that is negated by the fact that yanukovych is the legitimate president still and sent a letter asking for some kind of military support. negotiations are currently ongoing between at this mf and the government here trying to shore up the finances of the country which have been decim e decimated by 20 years of mismanagement ever since that orange revolution, as well. so a lot to play for on the geopolitical and on the economic fund, julia. >> you're right, steve. it ultimately reinforces the fact that the discussions going on on the ground with the imf are that much more crucial in terms of timing. are you hearing anything?
there's rumors overnight that we could see a quick financing, a fast cut financing of around $1 billion coming from the imf and potentially the same from the eu, too. >> yeah. we're hearing, of course, that some money has been forthcoming from the eu, less than $1 billion. i think it was 631 million euros. so yeah, that figure has been mentioned. but quite frankly, it would be a short-term fix. the financing needs of the country are on immediate. up until june, there's little refinanci refinancing, but there is a $1 billion repayment due in june. but longer term, and we are talking about a depleted economy as the economy minister told us yesterday. longer term, it's going to take a lot of investment and indeed loans and austerity from the government is what we've been seeing the business leaders throughout the last couple of days, as well. they need long-term investment for this country, julia. >> thanks so much, steve. great to chat to you this morning. that's it for today's show. i'm julia chatterley.
"squawk box" is up right after this break. ♪ [ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.
markets rebounding in global markets. tensions in ukraine show some signs of easing as russia order troops engaged in military exercises along the border back to base. secretary of state john kerry traveling to kiev to show support as the u.s. threatened sanctions and president obama is set to roll out the budget plan for 2015. it is tuesday, march 4th, 2014. and "squawk box" begins right now.
good morning, everybody. i'm becky quick along with joe kernen and andrew ross sorkin. our global markets are rebounding after easing tensions in ukraine. this morning, russian president vladimir putin ordering troops engaged in military exercises along the ukraine border back to base. perzs that t exercises that were linked to kiev. john kerry is set to arrive in kiev in just a few hours to show support for the new ukrainian government. as we're speaking, vladimir putin is holding a press conference. you can see right now, take a look at the market reaction as dow futures are up by 162 points. that would be gaining back more than the losses of yesterday. this comes after monday's tumble where you did see stocks lower. right now, the major european